So you reviewed the data, you have observed some inconsistencies and you have a hunch that there is some type of fraud or potential for fraud going on in or organization. How what do you donow?Do you go to your manager with the information? Do you whistleblow? Do you remain anonymous?The only correct answer is the one you are most comfortable with. They are pluses and minuses to each decision that you make. Each person here will make a decision that may be different from your colleague. There is no wrong answer to this question.

Things to consider:

Be prepared to stick with your decision as in you may have to look for another job, even career or even industry. You may receive praise for your action initially and then that praise can turn into caution and or negative consequences. I will share my experience with you only for your reference and to know that there is life after detecting and standing against fraud. One of the reasons why I changed industries from public accounting to working for the government and teaching is the environment that I was in promoted certain practices that were against my personal code of ethics and standing up for what seemed right to me was initially celebrated but with caution. I made the decision to change industries and it was the best choice for me. Not the most profitable but the most ethically sound decision.

Always keep in mind that as a CPA your reputation is your signature and it goes before you ever enter a room or organization therefore guard it with all diligence in every thing that you do be ethical and when in doubt go to the source, the accounting practices that govern your profession, speak with a responsible mentor to get advice and do what is right! It always pays off in the end.

Chapter 7 discusses the steps to take if you decide to investigate and report acts of fraud or theft. Chose a method and the timing that is appropriate. Decide on who is most vulnerable and when are the acts most likely to occur. The 5 W's who, what, why, when and where should be answered ahead of time. The most important take away is to have material evidence to support your position. As you build a case ask your self questions that a manager, police or HR would ask you with the goal of being devils advocate and having prepared or looked for the answers ahead of time. Be vigilant and cautious because the investigation could and may include you as a suspect in terms of the first question from the report that should be answered, how do you know this information? and how long were you aware of this information?

DQ7: What behavioral signs will a fraud reporter need to be aware of as they report suspected fraud?